flagFounded: Founded in 1937, acquired by Westpac in 2008

securityLMI Provider: Westpac LMI (WLMI)and Arch Capital (WLMI –A)

account_balanceLender type: Subsidiary of a Major Bank

St George Bank is a competitive retail bank that offers great home loans for first home buyers, investors and people looking to refinance to a better interest rate.

Although it’s owned by Westpac, it has its own pricing and tends to work with more first home buyers and young families than Westpac does. It also has some unique credit policies which can allow more people to qualify for a major bank interest rate

They’re focused on NSW although they do have other brands for VIC and SA / NT

Depending on how busy they are, they may be slow to assess your application

Why are they popular with first home buyers?

Getting a low rate on a 95% home loan can be quite an ordeal. Most lenders offer their best discounts for home loans where the loan amount is less than 80% of the value of the property.

St George Bank will still give great pricing, no matter the size of your deposit.

They also have a Family Pledge Loan which allows you to buy a home with no deposit as long as your parents are willing to put up their property as additional security for the bank. This isn’t for everyone, but it’s a great way to get into the market if your parents are willing to help.

What home loans types does St George Bank have?

Their professional package is known as the Advantage Package and it’s a great choice if you are borrowing over $250,000. In return for paying an annual fee, you’ll get a discounted interest rate and a range of discounts on other products such as your offset account and credit card.

Their Basic loan has no annual fees, but normally has a higher rate, and so it’s more suited to people who have smaller loans. St George has a Line of Credit known as a Portfolio loan which is a great choice for investors that buy and sell property or shares regularly.

Keep an eye out for specials that St George offers from time to time on Fixed rate loans. When these are on offer they can be some of the lowest in the market.

Their low doc loan isn’t the most competitive and has strict qualifying criteria so isn’t in high demand.

SGB client story: Brian, NSW

Goal

Situation

Background

After renting for a couple years, husband and wife solicitors Brian and Karen had moved up in their careers and were earning great incomes.

They decided it was time to stop paying dead money on rent and buy their very own home, a property worth around $1.4 million.

Having saved around $100,000 as a deposit, they needed around $100,000 more to borrow at 90% of the property value (LVR), complete the purchase and qualify for an LMI waiver, a special lender policy exception that applies to professionals like lawyers and medical professionals.

Under normal circumstances, LMI would be applied for LVRs over 80%. Since the couple was borrowing in excess of $1.2 million, they would be saving more than $25,000 on this cost alone.

Brian took out a $100,000 personal loan to come up with the deposit shortfall but unfortunately this component of their deposit wasn’t accepted as genuine savings because they didn’t save it themselves.

Without at least 10% deposit, they couldn’t qualify for an LMI waiver.

Solution

Although Brian’s personal loan didn’t count as genuine savings, he and his wife had been paying rent for the last couple of years at around $6,000 a month and they had the rental ledger to prove it.

Their mortgage broker told the couple that SGB will accept one year’s rental history in lieu of genuine savings and, in this case, it was able to support the character of Brian and his wife and their ability to afford the repayments on the $1,215,000 mortgage.

They hadn’t missed payment once so SGB accepted their 10% deposit and they were able to qualify for the home loan with no LMI.

Compare St George to other lenders

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Talk to one of our mortgage brokers by calling us on 1300 889 743 or complete our free assessment form.

Hi Zill,
Yes, you can use the FHOG as your deposit but it isn’t normally enough on its own. In total, you’ll typically need 5% to 10% of the purchase price, including the FHOG. But if you have a guarantor then you don’t need any savings whatsoever.

Saunders

Hello there, I applied with St George and got approved for a 95% home loan with an interest only repayments feature. Now I hear that they have capped their lending for any interest only loans to 90%. Does this mean that my loan will be rejected and I need to apply with SGB all over again?

Hey Saunders
According to St George’s announcement, this new policy of restricting interest only loans to a max of 90% of the property value, would be effective 15 May 2017 onwards. They stated that if an application is formally approved or an approval in principal has been issued prior to the 15th then the original approval should be permitted, provided it is not more than 90 days old. If there are any changes to the application then you may be subject to the new policy. Please feel free to call our office if you’d like to discuss this or check out other options available.

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